This article appears in the inaugural issue of BetaKit Most Ambitious. Go here to read more stories of bold ambition in Canadian tech.
Canada’s economy isn’t just facing a productivity problem, it’s facing a competition problem.
Across multiple sectors, market concentration is rising and new firms are struggling to scale.
A report from Statistics Canada and the Competition Bureau of Canada found that Canadian industries have become more concentrated over the past 20 years, and the number of highly concentrated industries has actually increased.
Challengers not only offer alternatives, but they make it harder for incumbents to coast.
At a time when competition is key, fewer small competitors are challenging Canada’s largest firms, and fewer companies are entering industries overall. The data confirms what many Canadians experience intuitively: our markets aren’t dynamic, they’re dormant.
The stagnation comes with a cost. Canada’s banking sector remains highly concentrated, with the “Big Five” controlling most of the market and preventing competitive pricing. In the insurance sector, three companies dominate property coverage, driving up premiums for small businesses. In healthcare, Canadians struggle for access to their electronic medical records because of regional vendor lock-in, and are limited in their choices and access to medication at pharmacies because of the companies that control those options behind the scenes. Airlines are similarly consolidated: two carriers control about 80 percent of domestic flights. In telecom, three providers collectively hold nearly 90 percent of the wireless market. Even retail, often assumed to be more competitive, is dominated by a few powerful players like Walmart and Amazon.
If we want better outcomes for consumers, workers, and entrepreneurs, we need new entrants ready and able to shake things up. This isn’t just about market share; it’s about a lack of pressure to improve. When incumbents are pushed, they innovate or get displaced.
Canada needs more companies that break open markets as category challengers, making plays in clubby spaces dominated by legacy players.
Challengers not only offer alternatives, but they make it harder for incumbents to coast. They inject energy, urgency, and experimentation into the landscape.
They can’t do it alone. Market dynamism will require Canada to dismantle closed and anti-competitive systems, open doors, end gatekeeping, and ensure that new players have a real shot.
If we want to build from Canada, and not just in Canada, the country must reject the status quo and bring ambition to spaces that have been “spoken for” for far too long. The time is now to challenge monopolies, boost competition, and reshape calcified Canadian markets.
Vass Bednar is currently the Managing Director of the Canadian SHIELD Institute and the former Executive Director of McMaster University’s Master of Public Policy Program. She is also the co-author of The Big Fix: How Companies Capture Markets and Harm Canadians, and an advisor to the Canadian Anti-Monopoly Project.
Feature image courtesy Stocksy.
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